News & Events
Intersil Announces Record Third Quarter Earnings

— Orders grow 36%, revenues grow 26% over fiscal 1999
— PRISM^® Wireless orders soar 521% as revenues increase 211% annually
— Gross margins improve 160 basis points sequentially
— Adjusted earnings per share (E

PALM BAY, FL. – April 20, 2000 – Intersil Holding Corporation (NASDAQ: ISIL) today reported record financial results for its third fiscal quarter, ended March 31, 2000. Compared to the same period in the prior year, orders for the third quarter of fiscal 2000 were up 36%, sales grew 26% to $170.9 million and adjusted operating income—which excludes IPO-related costs—improved 110% to $18.1 million. When compared to the previous quarter, orders grew 16%, sales grew 8% and adjusted operating income rose 20%. Adjusted net income, which is net income before amortization of acquisition-related intangibles and one-time charges, was $5.8 million or $0.07 per fully diluted share of common stock.

"Our third quarter results were outstanding," said Greg Williams, president and chief executive officer. "The better than expected results were primarily due to particularly strong demand for our wireless chip sets and analog/mixed-signal integrated circuits; we continue to see orders momentum building in the integrated communications market. Revenues from integrated communications products grew 20% from the previous quarter and now represent 48% of our total sales. This increased mix of integrated communications revenues improved our gross margins by 160 basis points over the previous quarter to 40.6%."

Intersil completed its initial public stock offering on February 25, 2000. IPO-related expenses and one-time charges were $26.8 million. Including amortization of intangibles, one-time charges and nonrecurring preferred stock dividends, the company reported a net loss of $22.7 million and a loss of $0.32 per fully diluted share of common stock.

The $550 million raised in the IPO, net of fees, was used primarily to retire outstanding debt. This resulted in a net cash position, cash less remaining debt, of $7.4 million. In addition, Intersil has further improved its working capital over the previous quarter, including a reduction in days sales outstanding by one day to 50 days and a $5.4 million decrease in inventory.

Results by Business Unit

PRISM Wireless Products
Intersil’s PRISM Wireless Product sales grew 211% from the same quarter of fiscal 1999 and were up 54% from the previous quarter to $14.3 million. Demonstrating Intersil’s industry leading position in high-data-rate wireless networks, PRISM orders soared 521% compared to the same quarter last year.

"Demand for our wireless LAN chip sets continues to grow as the industry leaders in the emerging wireless networking market begin ramping up production of high-data-rate products," said Williams. "During our most recent quarter we announced significant design wins for our new 11 megabit-per-second PRISM II chip set at companies including 3Com, Compaq, Farallon, Symbol and Zoom Telephonics; adding to a customer list that already includes Cisco, Nokia, Nortel, Samsung and Siemens. Our PRISM chip set was recently used in a cable modem at AT&T Labs’ annual Innovation Forum to demonstrate that wireless LAN technology is practical for distributing high-quality voice, compressed video and Internet communications throughout the home. Intersil’s PRISM chip set is becoming the architecture of choice for high-data-rate wireless connectivity, providing flexibility and increased productivity in the office and at home."

Analog & Mixed-Signal Products
Intersil’s Analog & Mixed-Signal Products business reported sales growth of 17% to $103.4 million compared with the same period last year. Third quarter orders for Analog & Mixed-Signal grew 29% compared to the third quarter of fiscal 1999.

"Demand for our analog products aimed at integrated communications continues to grow," said Williams. "We successfully introduced several new digital radio products during our third fiscal quarter as well as integrated circuits for emerging Voice-over Internet Protocol (VoIP) applications. We believe that the growth within this business unit has been fueled by the increasing demand for semiconductors used in broadband communications. Customer design activity for our new multiphase power management solution for next generation Intel and AMD microprocessors is very strong."

Discrete Power Products
When compared to the same quarter of fiscal 1999, Intersil’s Discrete Power Products business reported sales growth of 26% to $53.2 million, while orders increased 10%. Orders strengthened and lead-times extended, particularly during the second half of the quarter.

"We continue to experience strong market acceptance for power products tailored for the demands of Internet servers and portable communications," added Williams, "and we’re achieving world-class yields from our eight-inch discrete power wafer fabrication facility in Mountaintop, Pennsylvania. We also announced a breakthrough technology in the development of metal oxide semiconductor field effect transistors (MOSFETs) that will improve battery life in laptops, cell phones and portable information appliances, while significantly reducing die size."

Business Outlook
Looking ahead to the fourth fiscal quarter, Williams said, "Order rates accelerated in nearly all areas during the quarter – especially in the integrated communications area – and we anticipate sequential growth in revenues, margins and EPS for the quarter ending June 30, 2000. Given current market conditions and our strong backlog position, we now expect revenues to grow in excess of 20% for the calendar year. With our strong cash balance and significantly reduced debt, we continue to generate cash and are extremely well positioned in the fastest growing area of the chip sector – integrated communications."

Intersil has filed an 8K with the U.S. Securities and Exchange Commission to convert to a calendar fiscal year commencing December 30, 2000.

About Intersil
Intersil uses its semiconductor expertise to enable highly integrated voice, data and video communications. Intersil's integrated communications portfolio includes PRISM® Wireless Local Area Network (WLAN) chip sets that enable mobile connectivity products for the home and office; analog and mixed-signal integrated circuits for broadband access to wireless and wired Wide Area Networks (WANs); and power management products that enable 24X7 reliability in network servers, next generation PCs and information appliances. For more information about Intersil, visit the company’s Internet homepage at www.intersil.com.

This press release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect management's current assumptions and estimates of future performance and economic conditions. Specific risks include worldwide demand and product pricing for integrated circuits; general economic conditions and specific conditions in the markets we address; reductions in the U.S. and worldwide defense and space budgets; and other factors. In addition, Intersil cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends and events to differ materially from those matters expressed in or implied by such forward-looking statements. Specific risk factors can be found in Intersil’s filings with the Securities and Exchange Commission.

PRISM is a registered trademark of Intersil Corporation.

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